China is heading towards an almost fully electric car market
China’s car market could make a leap over the next decade and a half that Europe and the United States are still only circling. Ouyang Minggao, a professor at Tsinghua University, believes that by 2040, about 90 per cent of China’s new energy vehicle segment will belong to fully electric cars. The forecast says quite a lot at once, about China’s industrial strategy, about battery technology and about the temporary role of hybrids.
According to Auto.ru, Ouyang expects electric cars and plug in hybrids, grouped together as NEVs, to account for more than 70 per cent of the Chinese market by 2030. Within that, the split between full EVs and plug in hybrids is expected to settle at roughly 7:3. Five years later, new energy vehicles would already command 80 per cent of the overall market, and by 2035 fully electric models would make up 80 per cent of the segment itself. By 2040, that figure climbs to 90 per cent.
The core of the forecast lies in technological efficiency. Ouyang argues that fully electric cars use energy far more effectively than combustion engined models. That point matters enormously in the Chinese context. The country is not simply chasing lower emissions, it also wants greater energy efficiency, less dependence on liquid fuels and tighter control over the whole value chain, from battery cells to software. In that sense, China is moving logically towards a solution in which technical efficiency, industrial scale and state policy all reinforce each other.
Ouyang’s view on hybrids matters just as much. He says plug in hybrids and range extended models, both of which are enjoying a strong run, will begin to surrender market share as buyers become more aware of the practical advantages of pure electric cars. That is worth noting, because until quite recently much of the market treated PHEVs and EREVs as the main engine of China’s growth. Now the signal is different. The rapid rise of hybrids may turn out to be less a destination than a bridge, leading buyers towards a full EV in the end.
CAAM data cited by CnEVPost showed that wholesale deliveries of battery electric vehicles in China reached 831,000 units in March 2026, up 71.69 per cent on the previous month and 3.2 per cent year on year. Growth across the broader NEV segment was more restrained, which suggests BEVs remain the most strategically important part of the sector even when the wider market wobbles. China’s NEV production and sales also reached 1.231 million and 1.252 million vehicles respectively in March.
Still, this forecast should not be read as a neat and inevitable straight line. Ouyang himself said the next major push could come from solid state batteries, but mass production is still being held back by unresolved technical problems. He also warned manufacturers not to use solid state batteries as a marketing gimmick. The warning matters. China’s leading experts clearly see huge potential in new battery chemistry, but they also understand that industrial scale, reliability and cost still decide who wins.
If China moves towards full EV dominance through the 2030s, it will reshape the investment logic of the global car industry. Carmakers will have little choice but to pour capital into batteries, electrical architectures, semiconductors and software platforms if they want to avoid falling behind the technological standard of the world’s biggest car market. That, in turn, puts pressure on manufacturers in Europe, Japan and the United States to decide whether they keep defending the healthy profits of hybrids, or accelerate the electric shift and bring products to market that can compete with China on volume. Ouyang’s forecast is more than an academic view. It is a strategic marker for the entire industry.
